By Emeka Ezekiel, Abuja

Tuesday, 9 Nov 2010

The Federal Housing Authority has called for the establishment of a N300bn special intervention fund for the housing sector.

The Managing Director/Chief Executive Officer, FHA, Mr. Terver Gemade, made the call during a national seminar on Social Housing Delivery in Nigeria in Abuja, on Monday.

He said that part of the money would serve as a revolving fund for the provision of mortgages for social housing, while a substantial portion would be used to subsidise infrastructural development.

Social housing is a non-profit or Cooperative housing initiative with some elements of subsidy. It is usually owned and managed by states’ non-profit organisations, or both, with the aim of providing affordable mass housing.

Gemade stressed that the establishment of the intervention fund had become imperative because the existing mortgage structure in Nigeria had made it difficult for low income earners to have access to decent accommodation.

According to him, “Many Nigerians do not have access to suitable and decent accommodation in the existing structure of housing. For majority of Nigerians, access to decent housing is mainly through rental accommodation rather than home ownership.

“Efforts by the government in the past to develop an efficient housing finance system has experienced little success. Currently, there is limited access to the National Housing Fund by the target group of low and medium income earners who constitute about 70 per cent of the contributors to the fund. The mortgage finance system in the country is not yet in line with best practices in most countries.”

Gemade added, “Therefore, there is a critical need for intervention by governments at all levels, spearheaded by the Federal Government, in order to bridge the affordable gap in the housing sector.

“In order to address this problem, there is a need for the establishment of a special intervention fund of N300bn. Part of the fund should be treated as revolving fund for the provision of mortgages for social housing. Substantial part of the fund will serve as infrastructure subsidy for social housing.”

However, the Acting Managing Director, Federal Mortgage Bank of Nigeria, Mr. Michael Nwogbo, said the bank would consolidate by NHF collection as part of its strategy to encourage home ownership among Nigerians.

 

Source: Punch